Labor union groups vow to take collective action

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Labor union groups vow to take collective action

Korea’s two major labor union groups are poised to take collective action against President Park Geun-hye’s repeated and emphasized calls for the so-called normalization of debt-ridden public institutions, which have been the target of government criticism over the past year for abusing their budgets and showering their employees with excessive benefits despite surging debt.

The Korean Confederation of Trade Unions and the Federation of Korean Trade Unions, which formed a joint committee last month and represent labor unions at 38 state-run companies, vowed for collective opposition to Park’s reform plans.

The two umbrella organizations argue that the government is blaming employees for mounting debts, when unprofitable and wasteful spending projects are to blame.

“We will wage a full strike against the government if it tries to place the responsibility for losses [at state institutions] squarely on workers,” said the two labor groups in a joint statement earlier this month.

The joint committee claimed that welfare programs at these public companies are not linked to soaring debt, and noted that Park’s plan to discard welfare programs at such entities will only save 160 billion ($150 million), a miniscule fraction of a 411 trillion won debt carried by the 12 most-indebted state-run institutions.

Amid increasing concern over a potential conflict between the labor sector and the government, Choi Kyung-hwan, floor leader of the ruling Saenuri Party, lashed out at unionists yesterday, calling their highly anticipated collective action an “attempt to only preserve their vested interests.”

“Every year, labor unions at state-run companies demand increases in workers’ wages and make underhanded deals in return for excessive welfare benefits, which wouldn’t even be imaginable at private companies,” Choi said yesterday during a party leadership meeting at the National Assembly.

“There is a long history of labor unions and managers at public companies signing surreptitious agreements to provide excessive benefits [not disclosed on official agreements].”

Choi’s remarks yesterday came three days after President Park addressed the need to tackle financial disarray at state institutions.

“[…] That labor unions at public institutions are going to oppose to the reform plan with collective action is deeply worrisome,” the president said Monday during a Blue House meeting with senior secretaries.

Park made her point by noting that the top 12 public institutions with the most debt had spent more than 300 billion won in welfare expenses over the past five years despite their combined debt exceeding 400 trillion won at the end of last year.

According to government data, 38 public companies spent an average of 6.28 million won in 2013 on welfare expenses for each employee, with some even paying overseas study expenses for their employees or workers’ children.

The government’s stern stance on irregularities at state-run institutions prompted those 38 entities to come up with self-reform plans. Those plans, submitted to the government earlier this month, suggested freezing annual salaries in 2014 and cutting back on welfare expenses.

In line with the Park administration’s demand, the Ministry of Strategy and Finance said yesterday that it will launch a special eight-day audit into 295 public entities starting Feb. 24.

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